It was great information!
Over the past couple of months we’ve been working with a real estate agent. We’re looking for a house in a smaller city. The houses are older and charming, especially close to downtown.
A couple of weeks ago we found a very nice house on a street we liked. It had been on the market for several months without a lot of action. It was overpriced. It was also being represented by the same agency as our agent.
We put in an offer that our agent assured us wouldn’t offend the seller. Boom! Immediately, there was another offer from a previously rejected buyer who ‘wanted to be kept in the loop’.
Working with our agent, we became increasingly alarmed with the amount of good information he and the other buyer’s agent were working with. On a house listed for over half a million dollars, we found our agent talking confidently about bids within $2,000 of each other, starting at our original bid. Our agent said this was logical. We found it maddening.
The problem with the process.
Here’s the problem. The real estate representation agreement that we signed with our agent is explicit. Where the same agency is representing both the buyer and the seller, agents are forbidden from sharing other offers with their clients. They are also forbidden from sharing personal information about the seller. They are even forbidden from directing their clients on what to bid.
We had all of that happen to us. In fact, it was quite helpful. And we’re not naïve, we’re sure it’s more common than uncommon because it is so helpful.
Except for two things: 1) it breaks the agent’s own rules and 2) it has consequences. In this case the seller got less than even we were prepared to pay because we were directed to bid less and – when we lost faith in the process – we walked away and eliminated the competitive bid situation. The house sold for only $2,000 over our original offer.
Does it really matter?
What’s ‘weird’ about this is we like our agent and trusted him. Giving him the benefit of the doubt, we think of him as being naïve. He seemed so used to a process that breaks all the rules all the time that he’d lost sight that what he was doing was wrong.
If he’s lucky it won’t matter – as in, he won’t get a prick client who sues him for being so stupid. If he get’s unlucky it will be too bad, so sad.
We’ve shared our concerns with our ex-agent. Give him credit, he said he got it. Now we need to find a new agent. And a house!